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Debentures 2

Total questions: 9

Worksheet time: 9mins

Name
Class
Date
1.

Discount on issue of debentures is restricted to

a)

10%

b)

20%

c)

25%

d)

None of these

2.

Electronics ltd. issued 10,000, 6% debentures of Rs. 100 each at a premium of Rs. 10. It will credit 6% debentures account by

a)

Rs. 11,00,000

b)

Rs. 10,00,000

c)

Rs. 9,00,000

d)

Rs. 8,00,000

3.

HP ltd. issued 5000, 8% debentures of Rs. 100 each at Rs. 95. It will credit 8% debentures account by

a)

Rs. 5,00,000

b)

Rs. 4,75,000

c)

Either (a) or (b) as it decides

d)

Rs. 5,25,000

4.

Which of the following is correct with respect to debentures

a)

They can be issued on credit

b)

They can be issued for consideration other than cash

c)

They cannot be issued as collateral security

d)

They can be issued partly on credit and partly in cash

5.

Apple computers ltd. issued 10,000, 7% debentures of Rs. 100 each at a discount of Rs. 6 on 1st October 2019. Interest for the year ended 31st March, 2020 will be

a)

Rs. 65,800

b)

Rs. 32,900

c)

Rs. 70,000

d)

Rs. 35,000

6.

William pens ltd. issued 10,000, 7% debentures of Rs. 100 each at a discount of Rs. 4. It has a balance in securities premium reserve of Rs. 25,000. It will write off discount on issue of debentures

a)

Rs. 40,000 from securities premium reserve

b)

Rs. 40,000 from statement of profit and loss

c)

Rs. 25,000 from securities premium reserve and Rs. 15,000 from statement of profit and loss (finance cost)

d)

Rs. 15,000 from securities premium reserve and Rs. 25,000 from statement of profit and loss (finance cost)

7.

Luxor pens ltd. issued 10,000, 7% debentures of Rs. 100 each at a discount of Rs. 4 redeemable at a premium of Rs. 6. It will write of loss on issue of debentures

a)

From securities premium reserve

b)

From statement of profit and loss

c)

From general reserve

d)

None of these

8.

Which of the following statement is correct

a)

A debentureholder is an owner of the company

b)

A debentureholder can get his money back only on the liquidation of the company

c)

A debenture issued at a discount can be redeemed at a premium

d)

A debentureholders receives interest only in the event of profits

9.

In the balance sheet of a company, interest accrued and due on debentures is shown under the main head

a)

Share capital

b)

Reserves and surplus

c)

Current liabilities

d)

Non current liabilities